EXCLUSIVE: SmartSource Owner Intensifies Fight Against Coupon Sellers

An effort to combat coupon insert sales that started with a small ad in a Tampa newspaper, will soon be spreading across the country. This past Sunday, the Miami Herald joined the effort. This coming weekend, South Florida’s Sun Sentinel and the Houston Chronicle will get on board. And dozens more newspapers are expected to sign on by the end of the year.

All of the papers are offering a reward for information that can help stop coupon insert sellers from obtaining large quantities of inserts using “unauthorized methods.” In other words, by stealing them – out of individual newspapers, from vending machines, or even by obtaining reams of inserts directly from the printing press.

It’s a growing problem that the coupon industry is intensifying its efforts to stop.

As detailed in an earlier story here on Coupons in the News, it all started last month, when the Tampa Tribune began running a series of ads, asking for information about local coupon resellers and how they might be obtaining their inserts.

While a spokesman for the newspaper gave the impression that the ads were the Tribune’s own idea, it turns out the effort is much bigger than that. The battle against the sale of stolen coupon inserts is being spearheaded by the largest publisher of coupon inserts in the country – and Tampa was just the opening shot.

“The Tampa market has had some security issues recently and we wanted to test this approach there first,” News America Marketing’s Senior Vice President of Media, Bob Cole, told Coupons in the News. It was News America, the publisher of the SmartSource coupon inserts, that first approached the Tribune about teaming up to get to the bottom of the problem in the Tampa area. “The reward is an example of how coupon publishers and newspapers can work together to stop coupon theft,” Cole said.

As the Tribune explained, so many coupons have flooded the market in Tampa, that shoppers there have been redeeming coupons at three times the national rate. And that’s not because the Tribune is selling three times as many Sunday newspapers. News America suspected something else was going on – that inserts were being obtained, and distributed, illegally.

“Stealing or selling stolen inserts is a crime that is subject to prosecution to the full extent of the law,” Cole said. “In the event that the stolen inserts cross state lines, it may become a federal crime and federal law enforcement may become involved,” he added. The aim of the ads, then, is to raise awareness of these facts, “and more importantly, receive actionable leads that will result in identifying the individuals responsible for stealing the coupon inserts, and shutting down the people selling them.”

After four weeks’ worth of ads in Tampa, in which people were invited to submit tips via email, the response has “exceeded our expectations,” Cole said. “Not only are we receiving leads, we are receiving VERY specific information about the individuals and locations that are involved… We are highly confident that those responsible for these acts will be brought to justice.”

That success has led News America to expand its efforts. Both the Miami Herald and its Spanish-language counterpart, El Nuevo Herald, have begun running their own appeals for information. The Sun Sentinel (and El Sentinel) and Houston Chronicle (and La Voz De Houston) will be next, but certainly not the last. “We are in discussion with other newspaper partners to roll out rewards in up to forty additional newspapers before the end of the year,” Cole said.

So what’s the reward for turning in a coupon insert thief? Most papers are offering a $500 bounty. But the biggest reward, News America says, could be preserving insert coupons for everyone. “When the inserts are stolen, legitimate newspaper subscribers and purchasers don’t get the inserts to which they are entitled,” Cole said. Secondly, the sale of stolen inserts “increases costs to the manufacturers. As a result, they may be less inclined to run coupons in the future, or they may offer coupons with lower values.” And finally, “newspapers rely on coupon inserts and have been working closely with us to establish strict security policies and procedures that must be enforced. If a newspaper does not follow these procedures or fails to respond to security issues in their market, SmartSource will no longer be able to distribute our coupons with them.”

That’s already happened with RedPlum, after publisher Valassis pulled its inserts from Tampa-area newspapers. If SmartSource pulls out too, that would leave nothing for local insert sellers to sell. But it would increase the likelihood that determined couponers will turn to insert sellers operating elsewhere in the country. Hence the nationwide effort to stem the trade in stolen inserts altogether.

Of course, some coupon resellers still do it the old fashioned way – by actually buying multiple copies of the local newspaper in order to get their hands on multiple copies of the Sunday coupon inserts. The industry frowns upon any form of coupon reselling, though at least doing it that way, on a smaller scale, does not involve trafficking in stolen goods.

But when it comes to the coupon resellers that News America is targeting, we’re not talking small scale. Some online sellers have been known to display photos of their stacks and stacks of hundreds, or even thousands, of coupon inserts – ready to sell, long before the Sunday paper even comes out. There’s little chance they’re getting their hands on all of those inserts by buying thousands of copies of that Sunday’s paper – several days in advance.

If you ever purchase coupons from an insert seller or a “clipping service”, the outcome of News America’s efforts could ultimately determine whether your source suddenly dries up. That might mean fewer coupons for you in the short term – but in the long term, the industry hopes, more and better coupons for us all.